What Happened At Riggs Bank?
The $25 million penalty for BSA violations that was imposed on Riggs Bank has sent shockwaves through the banking industry. No one wants to be in the same boat. Dan Stipano, OCC's Deputy Chief Counsel for BSA, shared lessons that should be learned from Riggs' adventure. First, banks must be committed to an anti-money laundering program from the top down. Second, the compliance program must be calibrated to the level of risk in the institution. You must have a risk assessment to know where the risks and vulnerabilities lie.
Regulators also learned some lessons. Regulators must be more sensitive to risk, especially in situations such as the embassy accounts at Riggs. Second, the regulators must take decisive action when they find deficiencies. The action must be sufficiently forceful to correct the situation. So don't look for mercy from your examiner. Neither the industry nor the regulators want another Riggs.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 7, 7/04
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